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Rocky Mountain Institute

(3BL Media/Justmeans) - With the start of the new session of Congress, there is a lot of maneuvering going on to establish turf and battle lines. Senator Lamar Alexander, long-time Republican senator from Tennessee, now the head of the Sub-committee on Water and Energy Development, has come out with a strong statement regarding the future of nuclear energy in this country.

The speech was entitled “The United States Without Nuclear Power,” and while that sounds like a perfectly reasonable title for an advocate of alternative energy, it was, in fact, anything but. The senator refers to a hypothetical day when the US is without nuclear power and calls it, “a day we don’t want to see in our country’s future.”

It’s not exactly clear who the “we” is that he’s referring, but it’s clear that it’s something that he wants to avoid. He gives three reasons and goes on to tell three stories.

The three reasons are:

We use a lot of electricity (25% of the world total)

Nuclear power provides 20% of that

Since “the world’s leading science academies and many Americans say climate change is a threat,” nuclear currently provides about 60% of the country’s carbon-free power.

These facts are all undeniably true, though they don’t, by any means, add up to the conclusion he draws from them.

((3BL Media/Justmeans) - We ran a piece a week ago about Barclay’s downgrade of the utility industry. The move cited fears of rooftop solar undermining the industry profitability the way that internet downloading has disrupted the music business. Once people have solar on their rooftops, they will buy considerably less electricity from their utilities, using it only as a dynamic storage mechanism, providing power when none is available from the sun. Solar panels are most effective at mid-day when air conditioning needs are highest, which is also the time that utilities can charge the highest rates to their commercial customers.

As the cost of battery storage system continues to fall, more customers will disconnect from the grid altogether, a phenomenon known as “grid defection.” Some analysts have raised the specter of a “death spiral” for the industry, where, as more customers defect from the grid, utilities will be forced to raise prices, encouraging even more customers to defect.

But according to Leia Guccione of Rocky Mountain Institute, You don’t want to defect because the greatest value comes from staying connected. When you’re off the grid, you need to invest in redundancy and into oversizing the system, so you end up taking a penalty that ranges from 10 to 50 percent of the cost of the system.”

However Guccione writes in her blog, “Because grid parity arrives within the 30-year economic life of typical utility power assets, the days are numbered for traditional utility business models.”

A new report entitled The Future of the Utility Industry and the Role of Energy Efficiency by the American Council for an Energy Efficient Economy (ACEEE) also puts these concerns into perspective. The study “estimates future electric sales under several scenarios, concluding that in the coming two decades sales will either be level, increase modestly or decrease modestly.”

The authors find, after reviewing more than 50 papers and other studies, that a death spiral is unlikely, even under the most extreme example. The most optimistic scenario (from the industry perspective) shows a growth rate in electricity sales of about 0.7% per year through year 2040. Worst case is an annual decline of about 0.39% over the same period. That works out to an overall drop in electricity sales of about 10%. While that is hardly good news for the industry, it hardly signals its demise, either.

(3Bl Media/Justmeans) - Will large capital-intensive power plants become the buggy whips of the 21st century, finding themselves in the undesirable position of no longer being needed?

Rob Wile of in Business Insider seems to think so. “It’s been a good run,” he says in the closing line of his assessment of the outlook for the electric utility industry. Citing the sector downgrade by investment bank Barclays from “market weight” to “underweight,” which refers to how much utility investment they are recommending for a typical portfolio, he sees trouble ahead.

That trouble comes in the form of residential solar, which is increasingly taking on the form of a perfect storm from the utilities’ perspective. First, the price of installed rooftop solar has plummeted, falling by half since the year 2000. That led to a rising number of installations, but the utilities could still count on continued sales since they continued to serve as the primary source of storage in the grid-connected systems that have been the predominant configuration. But now the cost of battery storage, helped along by the commercialization of electric vehicles, has also dropped. And if Elon Musk keeps his promise about a super-factory for batteries, the price will drop even further. In this case utilities will be the provider of last resort, only used when all else fails. Yet, even that requires the utilities to maintain roughly the same level of infrastructure as they do today, with little in the way of revenue to show for it.

It is somewhat reminiscent of the old saying, “why buy the cow, if you can get the milk for free?”

The problem is, we need to keep the utilities around, at least for the foreseeable future, because we need them to maintain the grid and to continue to deliver power those who can’t generate their own and also to those who can during those long cloudy spells, when the solar panels are idle and the batteries drained.

(3Bl Media/Justmeans) - Russell Gold’s pragmatic piece about fracking in the Wall Street Journal makes a number of excellent points. First, our economy has such an enormous appetite for energy, that there is no way we can simultaneously give up coal, oil, nuclear and natural gas, as much as the environment would like us to, without bringing things to a screeching halt. So pick your poison.

Conventional wisdom has been that gas is the lesser of the four evils, especially after Fukushima, where nuclear lost most of whatever remaining luster it had. Even the esteemed Rocky Mountain Institute said we could wean ourselves off the other three, while growing the economy, so long as we had natural gas as a “bridge fuel.” That was before the precipitous drop in gas prices due to the discovery of Marcellus Shale and before the realization of the many issues associated with fracking.

Gold mentions several of them: the leaks, the lack of water testing or understanding as to what constitutes a safe and suitable site, and the lack of quality control throughout the process.

He does not mention several other issues including the question of earthquakes triggered by fracking, and the presence of radon in the gas. Radon has a radioactive half-life of 2-3 days. The means that by the time it reaches New York from places like Louisiana, it is no longer radioactive. But it can get to New York a lot faster from Pennsylvania.

Mr. Gold focuses more on pre-testing water before drilling in order to protect companies from “abusive false claims” of water contamination, than he does on legitimate claims.

As to the question of leaks, which the National Renewable Energy Laboratory (NREL) recently found were serious enough to make natural gas less climate-friendly than diesel fuel (though still more benign than coal), he says it’s just a matter of finding the leaks and fixing them. That could be easier said than done, considering the shoddy state of much of our infrastructure, including oil and gas pipelines. There is also the fact that some of the leakage is intentional. Many natural gas wells operating in remote areas without electricity use pneumatic controllers that are powered by a flow of gas that spins a turbine before being released into the atmosphere. Annual releases of as much as 50 billion cubic feet have been recorded in recent years. The EPA has begun regulating these releases under the Clean Air Act, which has led to newer designs with lower emissions that are now being deployed. But these emissions could be cut to zero if solar powered electric units with backup batteries were used instead.

But perhaps the biggest omission is any discussion of any of the work that is currently taking place to actually make fracking safer.

According to the US Green Building Council, buildings are responsible for 39% of CO2 emissions here in the US. Everyone understands that make buildings more efficient can have a huge impact on climate stability. In a report, discussing barriers to sustainable construction, a paper by the Rocky Mountain Institute, acknowledges that the lack of an integrated systems approach to building design is a major barrier. The same paper also notes that 37% of all construction material is wasted. A good deal of that waste comes from drywall. According to waste management specialists at the University of Wisconsin, approximately one pound of drywall is discarded fro every square foot of new constriction.

Drywall has been an economical and serviceable building material for quite a few years, but it has its problems. It is energy intensive to produce, accounting for 1% of all energy-related emissions in the US. Synthetic gypsum is made from coal plant emissions and have been found to contain mercury and other heavy metals. When placed in landfills it tends to emit hydrogen sulfide gas and leach out biocides. The material is recyclable, where it can be used to make new drywall, or used as a soil additive. But finding a recycler is not always easy.

Enter DIRTT, a Calgary-based manufacturer of modular building interior solutions. Their modular interior systems address several of these issues. DIRTT uses a 3-D software package that allows designers to fly through their simulated building environment, making changes and updating their designs in real time. This not only supports an integrated systems approach, with its many benefits, but it also provides an flexible modular environment that can be easily reconfigured, is drywall-free and can actually be built, in most localities, for less than conventional construction. In the past five years DIRTT has prevented approximately 65 million pounds of construction waste

Julie Pithers: We started R&D 10 years ago. Then opened for business in May 2005

JM: And how has it been going?

JP: Great. We grew by $20 million in sales each year through the recession, 85% of our sales are in the US

JM: What does the name DIRTT stand for?

JP: Doing it right this time.

JM: I see. So if I understand correctly, you make pre-fabricated, modular interiors that are reconfigurable, taking advantage of modern production methods to reduce cost.

JP: That's right.

JM: And who are your customers?

JP: Our fastest growing segment is health care. We're also education, office space, and a number of other areas.

JM: How is it that you can beat the cost of conventional construction?

JP: Because our systems are pre-configured at the factory, they can be assembled at the site very quickly. Most construction runs 70% labor and 30% materials. We turn that on its head. So, with the exception of localities with very low labor rates, we can usually provide the lowest cost. We have a software program called ICEberg. It's a database filled with every material, code and labor cost from over 1300 jurisdictions in North America. It provides an apples-to-apples comparison of the monetary and environmental cost of building your space conventionally or using DIRTT. So you don't have to just take our word for it.

The European Commission has proposed revisions to the EU’s commitments to emissions reduction targets citing the high cost of fossil fuel alternatives at a time of economic uncertainty. The new EC proposal involves moving from binding targets for individual countries to an all-Europe standard that would grow from a 20 percent reduction by 2020 to a 40 percent reduction by 2030.

There’s clearly a lot of pressure behind the scenes by people worried about the economy, governments who fear they will not be able to achieve their targets, and the oil and gas industries, who have vested interests in maintaining their hegemony as long as they can.

The move to end the binding targets that were set, country by country, in exchange for a Europe-wide goal raises an important question. How are they going to enforce it? If 2030 comes and all of Europe falls short, who are they going to penalize and how are they going assess the penalty? The implementation of this seems quite vague.

The new proposed target of 40 percent reduction sounds good, after all, it’s double the 20 percent goal by 2020, which they’re well positioned to meet—and 40 percent reduction is pretty aggressive compared to what we’re doing in the U.S. But if you look at what Europe has already accomplished, they’re already on track to meet that. There’s no acceleration in the rate of reduction. The message is, just stay the course and by 2030, with continuing reductions, we should hit 40 percent. The only caveat there is that the current trend is based on the fact that Europe's economy is pretty slow right now. Should the economy pick up, it’s going to be more of a challenge to hit that target.

That concern is shared by Gunther Oettinger, the EU's Energy Commissioner. Oettinger has said that the easy reductions came first, and that additional reductions will be increasingly difficult. He also said that Europe's carbon contribution, which is 10.5% of the world total today, would drop to 4.5% if the goal is met, too small to really make a difference.

Others would argue that all entities have a moral obligation to do everything they can. That's the position taken by Brook Riley, who is the Friends of the Earth chairman in the region. Riley has said that Jose Manuel Baroso, president of the European Commission, who announced the proposal, is subscribing to the “old think” industry spin that there has to be a tradeoff between climate action and economic recovery. That’s based on an outdated model.

I personally agree with Riley. There’s a mind set that says, “this is the way our economy must operate,” a premise based on centralized energy sources managed by big companies. First of all, it’s shortsighted—many people have weighed in to say we can absolutely improve the economy while we switch to a more sustainable energy policy. Amory Lovins of the Rocky Mountain Institute is one of the more notable voices. His two books on the subject, WinningThe Oil Endgameand ReInventing Fire lay out the path forward. These books describe how we can move to an 80 percent renewable-based economy by 2050, at a profit, while saving $5 trillion in the process. The problem is, you have to really look outside the box, something that Lovins does particularly well.